China goes for the Gold

HONG KONG – China, the largest producer of gold, may also become the biggest consumer of the metal in 2012, overtaking India in that regard, the World Gold Council said on Thursday.

That rise to the top position would come at the same time as an increase in the demand for gold for use in jewelry and as an investment, the council said. In 2011, China’s demand for gold bullion increased by 20 percent to reach 769.8 metric tons,while India’s gold consumptiondeclined by 7 percent to hit 933.4 tons.

Those changes cameabout in part because of fluctuationsin gold prices and a weak rupee, according to the WorldGold Council, a marketdevelopment organization for the gold industry.

In the second half ofthe year, the demand for gold increased faster in China than any other place in the world, itadded.

“There is a major boost to the overall figures from the increase in Chinese demand, which is attendthat we see continuing over the next year,” Marcus Grubb, managing director of investment at the council, said in a statement.

“It is likely that China will emerge as the largest gold market in the world for the

first time in2012.”

If the most recent quarter is looked at, rather than an entire year, China has already become the biggest buyer of gold in the world. In the three months leading up to Dec 31,2011,the country bought 190.9 tons of the metal, and India, during the same time, bought 173 tons,the council said.